MUMBAI: Private equity firms shifted their focus from residential real estate in 2016 to office property segment compared to 2015. A slowing sales volume and pile up of unsold inventory in the residential segment seems to have led to the shift in private equity players’ focus, showed a Knight Frank India report.

Strong demands for office space, rising rental values and low vacancy levels have brought back the attention of private equity firms towards the office segment in 2016 with its share rising to 35% from 18% in 2015, the report added.

Shortages in quality retail space and increasing rental values have attracted private equity players towards the retail segment in the last two years. Blackstone Group's purchase of L&T Realty's Seawood Mall in Navi Mumbai and Singapore sovereign fund GIC's investment in Sheth Developer's Viviana Mall in Thane, were some of the large deals concluded during the year.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.